What is this variation agreement template?
The basics: This variation agreement template, also known as a letter of variation, can be used to vary the terms of an existing agreement (i.e. delete, amend or add further provisions).
The important stuff: Where the original contract is in writing, there will typically be a term in the contract which requires any amendment or variation of that contract to be made in writing and signed by all parties or their authorised representatives. This variation agreement template provides a structured way for each party to formally document the changes to the original contract in writing.
What are the benefits of using this variation agreement template?
Avoid entering into a brand new contract: Rather than entering into a brand new contract, it may be preferable to vary the existing contract so that only certain terms are being amended, replaced or deleted. For example, you may wish to extend the term of the contract before it expires, but want the remaining existing terms to stay in effect as they still apply to the relationship under the contract. This variation agreement template could be used to vary and extend the term of the existing contract, rather than entering into a new one.
Consideration provided for legal validity: When the terms of a contract are varied, the requirements for the formation of a valid contract must be met. For a contract to be legally binding, there must be consideration, i.e. where both parties exchange something valuable, whether it's money, goods, services, or a promise to do something. This variation agreement template ensures that a small amount (£1), known as "nominal consideration", is given to establish a legally valid contract to vary the terms of the original contract. If consideration will not be given, another way of avoiding this issue is by executing the variation agreement as a deed.
Reduces misunderstandings: This variation agreement template offers a structured format for presenting specific details related to the original contract and each variation; minimising the risk of misunderstandings between the parties. The simplicity of the letter format in this variation agreement template is user-friendly and is written in plain English. You simply need to fill in the relevant details to create your own legally valid variation agreement, without the need for extensive legal knowledge.
When should you use this variation agreement template?
You should use this variation agreement template when you wish to vary a commercial contract and you are able to vary the contract in writing in accordance with the original contract’s terms.
When should you not use this variation agreement template?
You should not use this variation agreement template when you wish to vary a property contract or a deed.
What if the original agreement is a deed: If the original agreement that is being varied is a deed, a deed of variation should be used to vary it (rather than a letter form of variation). Simple contracts can be varied by either a contract or a deed. You can find our deed of variation template here. Please note, for a deed to be valid, it should be signed either by a single director in the presence of a witness who will also sign the deed, or by two 'authorised signatories' of the company (e.g., directors).
Assumptions
This variation agreement template assumes that the parties are incorporated in the UK, and that English law applied to the original contract, and applies to this variation agreement.
This document also assumes that there are no third party guarantors which may be required to give consent to the variation (i.e. where there is a separate guarantee in place in respect of the original contract).
Why Docue?
Simple: With Docue, you can create a top-quality document in minutes using this variation agreement template. The template includes model wording designed by qualified lawyers to help you draft the variation agreement yourself and tailor it to your needs.
All-in-one-place: Our cutting-edge technology combined with our lawyer-made templates allow you to create, customise, e-sign, store and manage your documents all in one place with just a few clicks.
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